Is it the fact that it isn't confined to a grid that is bothersome or is it the fact that you can run around while selecting an action?
Hmm..aren't these the same thing?
Anyway, for me it comes down to two main things: (1) aesthetics and (2) functionality.
First, I just like grid based movement in turn based RPGs a lot better. For one, it very reminiscent of wargames where movements are done in hexes or squares.
And even when wargames didn't necessarily have a discrete grid, their square bases kind of formed an imaginary grid in and of itself.
Which to me means that games that have some of the same looks and feel just make combat feel more satisfying on a visual level:
Besides, having things confined to a grid makes movement seem natural. The video clip you showed earlier has some awkward movements as the PC is being position. For example, the model goes from being in a fighting stance to lowering the stance and into a walk/run animation in a very unnatural way. Whereas a turn based game would script the movement from location to location, so it looks more natural.
For example, look at how the movement is compare din Blackguards...
And compare that to movement from a standstill in your game...
This is what I mean when I say it looks goofy.
The other part of liking a grid is that it's just more functional. I can move my units discretely without having to worry about positioning them how I want (not withstanding accidentally hitting the wrong square). There is no fidgeting around trying to make sure my character is facing the correct way. And that leaves me free to think about what I should be thinking about: The tactics of the battle.
Anyway, it's obvious that your movement system is baked in, so I'm not suggesting that you need to change it for me to enjoy it. It's just my preference.